The ultimate Apple Pay insight and analysis

There's no possible way it could of happened (unless you have been living under a rock) but if you have missed the news that Apple Pay was launched in the UK today, don't panic, we can help.

This article provides the ultimate Apple Pay analysis from industry professionals, giving you a comprehensive overview of Apple's attempts to rule the digital payments industry.

Security overview - David Emm, Kaspersky Lab

"It's good that the card details aren’t stored on the device, just a device-specific token (the Device Account Number) and a cryptogram generated per transaction. This reduces the opportunities for card data to be stolen – even if token and cryptogram were intercepted, it would not be possible to re-use them. And since the retailer doesn’t hold the card data, a breach of their systems wouldn’t result in compromised card details.

"However, it makes it more important than ever that people don’t ‘jailbreak’ their device, thereby stripping away the built-in security. It’s also important that people don’t let anyone else store their fingerprints on the device, to ensure that transactions can only be authorised by the owner of the device."

Missing the point about Apple Pay? It’s all about in-app, not in-store - James Allgrove, Stripe:

“It’s bizarre that the most transformative feature about Apple Pay - in-app payments - is being overlooked. The simplicity of buying things with a fingerprint means mobile conversion rates in apps are generally twice as high. This will power huge growth for mobile-first start-ups such as Bloom & Wild and Dice.fm which are revolutionising the way we buy everything from flowers to gig tickets.”

“Mobile is bringing the internet to everyone, everywhere, but the legacy financial infrastructure just hasn’t kept up with the internet economy. This has left us with a situation where only 2 per cent of global consumer spending happens online, despite the web being 25 years old. Fixing this and enabling more transactions on mobile is a challenge rooted in code and design, not finance.”

“It’s fairly safe to say that the Apple Pay Secure Element is as secure as the chip in the chip and PIN cards in your pocket, purse or wallet. Consider that the underlying architecture and standards which define what a Secure Element is, what it does and how it protects sensitive data, also cover the security hardware which we see every day in our chip and PIN cards.

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"In fact, in many cases, exactly the same hardware as is used in our EMV-compliant chip and PIN cards will be integrated into handsets like the iPhone 6 as the Secure Element.

"Not only is the hardware basically the same, the microcontroller which is at the heart of chip and PIN cards and Secure Elements will have been subject to rigorous security testing to ensure that it is fit for purpose i.e. able to withstand external attacks and to employ tamper-resistant techniques to ensure that information is wiped should a hardware attack be detected.”

“The launch of Apple Pay has caused a real shift in the payments landscape - its UK debut will be exciting news for consumers, offering access to a slick and quick payment option with a brand they love, and carry around with them 24/7. What these consumers won’t see, however, is the significant rearrangement behind the scenes as card schemes and issuing banks grapple to establish new relationships, security approaches and commercial models.

"The launch will cause further momentum in an already extensive contactless NFC terminal infrastructure in the UK – a further endorsement of the established payment rails and EMV infrastructure. This will likely lead to an uptick in adoption of mobile payment technology, and consequently, Apple will find itself in a constant battle to balance user convenience with ensuring security is factored in from the start.

"This simply has to be a number one priority if consumers are going to put their trust in mobile payments. With that in mind, it is encouraging to see tokenisation at the heart of the security agenda, which will help issuers with payment channel separation and also protect the merchant in the event of a data breach."

"Apple Pay's launch is certainly good news for the UK, taking the country to the era of digital payments using the NFC technology.

"What has always been a struggle is for Apple Pay and the competitors to build a large enough ecosystem of merchants and bank partners in order to enable immediate adoption.

"While it is not clear why HSBC has decided not to support Apple Pay's UK launch, it certainly rings alarm bells as consumers often have a 'now or never' approach to new technologies, easily deciding not to adopt for a long time if it is cumbersome to do so at the beginning."

A gamechanger, or just a lot of noise? - Jens Bader, Secure Trading Chief Commercial Officer:

“The first thing to remember when it comes to Apple Pay is that contactless payment is by no means new, or unique to Apple. The use of Near Field Communication (NFC) technology for payment is well established. Contactless cards have already been successfully trialled, adopted by card issuers, and embraced by UK consumers.

“Apple is simply trying to brand the NFC technology. No doubt, Apple is imagining customers will walk into a shop and ask the question “do you accept Apple Pay here?” which, in my opinion, is an unlikely future. With so many competitors adopting contactless (from card companies, to other tech schemes such as Android Pay), “contactless accepted here” is the sign I expect to see on shop-fronts.

“While the combination of contactless with mobile technology will promise increased functionality, such as the ability to see your balance on your phone screen as you pay, or receive an instant e-receipt, whether these features will be enough to completely alter the payments industry is a different story. I think it is definitely premature to say that Apple Pay will be the death of cash and cards. While the omnipotence of smartphones for the younger generation may make contactless mobile payment desirable for some in that demographic, the vast majority of the population will stick to what they know.

“Working in the payment industry you sometimes forget that there are still people uncomfortable with mobile technology, or even paying on their computers, but the reality is that this is the case – so Apple Pay is a far stretch for this demographic.

"Cash is by far and away the most inclusive payment method (used internationally and across all sectors of society) and therefore will remain safely unchallenged as the most successful payment method.”